Slowly more people see the “quiet coup” now in progress

Summary: Slowly the quite coup in motion becomes visible to Americans. One by one. Unfortunately we’re still early in the problem recognition stage, while the coup advances rapidly. Here are three articles, milestones along the road away from the Second Republic to our new political regime (not yet visible).

The revolution can be AGAINST us, not BY us.

Contents

These are scary articles. But they have no impact because the essence of a democracy’s fall is that its people lose the capacity for self-government. We evolve from citizens to subjects (“consumers”). The reins of power slip from our hands, but we don’t care. One by one our rights are re-interpreted into powerlessness, but we don’t care.

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government — a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises.

If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

… I fear that at least since 2010 we’ve been witnessing a quiet, slow-motion coup d’etat whose purpose is to repeal every bit of progressive legislation since the New Deal and entrench the privileged positions of the wealthy and powerful — who haven’t been as wealthy or as powerful since the Gilded Age of the late 19th century.

Its technique is to inundate America with a few big lies, told over and over (the debt is Obama’s fault and it’s out of control; corporations and the very rich are the “job creators” that need tax cuts; government is the enemy, and its regulations are strangling the private sector; unions are bad; and so on), and tell them so often they’re taken as fact.

Then having convinced enough Americans that these lies are true, take over the White House, Congress, and remaining states that haven’t yet succumbed to the regressive right (witness Tuesday’s recall election in Wisconsin).

I desperately hope I’m wrong, but all there’s growing evidence I may be right.

Normally I shy away from apocalyptic readings of the American predicament. We’re a big, messy country; we’ve been through a lot — perhaps even more than we thought, what with Abraham Lincoln and the vampires. We’ll probably muddle through this and be very worried about something else ten years from now.

But when you look at the sequence from Bush v. Gore, through Citizens United, to what seems to be coming on the health-care front; and you combine it with ongoing efforts in Florida and elsewhere to prevent voting from presumably Democratic blocs; and add that to the simply unprecedented abuse of the filibuster in the years since the Democrats won control of the Senate and then took the White House, you have what we’d identify as a kind of long-term coup if we saw it happening anywhere else.**

Liberal democracies like ours depend on rules but also on norms — on the assumption that you’ll go so far, but no further, to advance your political ends. The norms imply some loyalty to the system as a whole that outweighs your immediate partisan interest. Not red states, nor blue states, but the United States of America. It was out of loyalty to the system that Al Gore stepped aside after Bush v. Gore. Norms have given the Supreme Court its unquestioned legitimacy. The Roberts majority is barreling ahead without regard for the norms, and it is taking the court’s legitimacy with it.

… ** You can try this at home. Pick a country and describe a sequence in which:

First, the presidential election is decided by five people, who don’t even try to explain their choice in normal legal terms.

Then the beneficiary of that decision appoints the next two members of the court, who present themselves for consideration as restrained, humble figures who care only about law rather than ideology.

Once on the bench, for life, those two actively second-guess and re-do existing law, to advance the interests of the party that appointed them.

Meanwhile their party’s representatives in the Senate abuse procedural rules to an extent never previously seen to block legislation — and appointments, especially to the courts.

And, when a major piece of legislation gets through, the party’s majority on the Supreme Court prepares to negate it — even though the details of the plan were originally Republican proposals and even though the party’s presidential nominee endorsed these concepts only a few years ago.

How would you describe a democracy where power was being shifted that way?

Update: Underscoring the point, a Bloomberg poll of 21 constitutional scholars found that 19 of them believe the individual mandate is constitutional, but only eight said they expected the Supreme Court to rule that way. The headline nicely conveys the reality of the current Court: “Obama Health Law Seen Valid, Scholars Expect Rejection.”

Tinman’s comment is a commonplace, giving a broad statement and concluding that history shows no change. In fact such statements show only that human history takes place between heaven and hell. Magnitudes (degrees) matter. Inequality varies between societies, and over time within a society. These changes might seem small to people who see only black and white, but make a LARGE difference to people living here and now.

Specifically, inequality has varied greatly during US history. It was low during the early years (not counting the slaves), reached a peak during the gilded age, declined after WWII — and has climbed greatly since 1980. That seems likely to continue, taking America where we’ve never been before. At some point inequality will exceed the operating envelope for the Second Republic, and regime change will result.

To people with a god-like viewpoint, that too will be “nothing new here.” It will make a big deal to the rest of us.

“But the most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly and with unflagging attention. It must confine itself to a few points and repeat them over and over. Here, as so often in this world, persistence is the first and most important requirement for success.”
— Adolf Hitler, Chapter 6 – “War Propaganda”, volume one of Mein Kampf (1925)

Thanks. I kind of had a general knowledge of our slow degradation into plutocracy, but the first article by Simon Johnson really gave some amazing insight. Coming from such an experienced professional (former chief economist of the IMF!), gives you many more talking points when it is brought up in conversation.

Frankly I doubt you have a clear idea how to define and measure inequality that would span history since the Roman times. And please spare us the oft quoted income examples of the last few decades. It’s but one example.

I see a pattern with you, Fab. Ask a question that befuddles you and you’re dismissive.

I’m NOT asking for a lit review. I’m simply asking a question of YOU since you’re making such a monumental, i.e. constitutional issue out of inequality. Well, how do YOU define it? Again spare me the lit search.

Your examples of “inequality” are at best disparate and at worst incoherent.

(1) See these posts about inequality and social mobility: once strengths of America, now weaknesses. This was an obscure concern when I first wrote about it in 2008; now its gone mainstream — with a rapidly growing body of both research and articles in the general media. Most of these contain links to articles and reports.

“Have we fallen behind our parents?“, Katharine Mieszkowski, Salon, 14 May 2008 — “Author Nan Mooney argues that the middle class is slipping, and fixing it is going to take more than cutting out lattes.”

“Inequality, Living Standards, and the Middle Class”, Scott Winship (Pew Economic Mobility Project), Progressive FIX, 12 January 2010 – Part One and Part Two.

“Top 400 Earners in U.S Averaged $345 Million in 2007, IRS Says“, Bloomberg, 18 February 2010 — “Each household in the top 400 of earners paid an average tax rate of 16.6%, the lowest since the agency began tracking the data in 1992, the Internal Revenue Service statistics show. Their average effective tax rate was about half the 29.4% in 1993…”

More warnings about rising inequality. These are by Joseph Stiglitz (2001 Nobel Prize in economics, former Chief Economist of the World Bank, and now a Professor of Economics at Columbia U):

“Of the 1%, by the 1%, for the 1%“, Vanity Fair, May 2011 — “Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income — an inequality even the wealthy will come to regret.”

Just a “Boots on the ground update” from over here in the real world FM. My (small, independently owned) manufacturing company just kicked GE’s ass out of a major province of China. While our Oligarchs squabble among themselves, we real world guys are just gittin’er done out here in the real world. Accelerating trend if anything. It’s not all bad. FIRE sector is caving in, that’s for sure. Plenty of flirting with fascism going on at max speed, but too little too late IMO. Us guys who know how to build things getting crushed by oligarchs? Not so much.

Oh all right. More and more, our small technology driven capital equipment company is gaining traction mostly in emerging markets with customers who have real problems to solve and still trust/acknowledge that the U.S. is one place, at least, to shop for answers. For 25 years, we (my little company) has had better technology, but historically we have been frustrated by competition from hybridized finance/equipment companies like GE-Capital/Ge who pressed their advantage as crony financiers against us. These advantages, once insurmountable, are now yielding as finance and leverage give way to a more cash and carry basis for world trade.

From our perspective, it’s a brave new world of competence based decision making on both ends. Our customers (Chinese and Latin America coal chemical, produced water, landfill leachate, electric power, and so on) seem smarter, and they are searching for, and finding, guys like us, who are also technically superior (but lack heavy finance/political arms). This is what fundamentally is scaring the crap out of our old oligarchs, who used to crush guys like us with a phone call and sprinkle the crumbs on their cereal.

fyi – Marc Andreessen (founder of Netscape) was on the Charlie Rose PS TV show today (6/27/12). He commented on the significant changes to economies in developing countries because of the “price transparency” that has come about as a result of the internet.

Inherent value of goods and services is rooted in consumption – things have some value that you would pay if you could never resell them. Good producers create things that are more inherently valuable than their components, and get positive cash feedback if the market is theoretically perfect.

Finance, Insurance, and Real Estate all work in an economy of speculative value – they purchase goods based only on potential for future resale, not their own consumption. Real Estate straddles into inherent value a bit, but the Westernized mortgage tradition causes homeowners to focus more on what they will be able to recoup in the future than what the day-to-day consumptive value of the house is.

End of the day, the only way you get more value in an economy is (1) more natural resources, (2) more labor/energy, (3) more land, or (4) more production of consumer goods/services. In the best case FIRE makes its money from ironing out inefficiencies, causing quicker feedback to the production cycle. In the worst case they make their money from duping and defrauding others.

But in all cases they’re secondary to producers->consumers. FIRE dominating the economy is a sign that markets are opaque and inefficient, or that they’re only doing relatively better because production->consumption has dropped. Or both: they’re forced to be more opaque and inefficient to compensate for a lack of good producers to invest in (see mortgage-backed derivatives).

It’s insane to think an economy can be supported by efficient trading of, but the current crop of politicians seems to really believe that FIRE activities are the “fundamentals of the economy.”

There’s an old Polish joke about a farmer who feeds his donkey less and less every week. When it finally dies of starvation, he says “Just my luck. I almost had it living on nothing at all!”

The rise of the Right was partly a result of the failure of the New Left to deliver on its promises of social change and social justice in the 60s. The Right appears to have been extremely deft in understanding the possibilities for discrediting the New Left’s abandonment of Labor ans Social Justices issues and then building support for the Right amongst people afraid of postmodern culture and politics (identity politics).

Less than twenty years after Fred Koch fought to destroy labor rights through “Right To Work” laws, the executive director of the ACLU, Aryeh Neier—the same Aryeh Neier who later led Human Rights Watch— colluded with William Buckley to push the ACLU rightward against labor by getting the ACLU to represent big business and “Right To Work” laws, under the guise of “protecting free speech”—the same bullshit pretense always used by lawyers and advocates to help big business crush labor and democracy. This “free speech” pretense is the basis on which the ACLU currently supports the Citizens United decision, which effectively legalized the transformation of America into an oligarchy.

I found an article from 1971 written by William Buckley in which the National Review founder praises Neier for working with him to turn the ACLU against labor:

… Maybe there’s no connection there whatsoever between the Kochs’ $20 million gift to the ACLU, and the ACLU’s advocacy for the Kochs’ pet political issue, Citizens United, which transferred greater power from democracy and into the hands of billionaire oligarchs like the Kochs. Maybe it’s all a coincidence,

… Most people don’t know Neier’s role in moving the ACLU against labor and against egalitarianism—instead, he did a lot of cheap grandstanding on behalf of Nazi marchers in Skokie. That’s the sort of pseudo-politics and pseudo-bravery that, stripped of economic politics and labor politics, results in the pseudo-left of today, a left absorbed by “identity politics” at the expense of labor, egalitarianism and socio-economic justice.